European regulators began to tighten measures against brokers. Belgium has already banned trading in currencies and contracts for difference. This hit the industry hard, but if Germany and France, for example, follow the Belgian example, the impact will be enormous. And most of the laws on financial regulation are adopted in Brussels. So there is no need to count on Europe’s disposition towards fintech.
So, what are the exits of brokers?
1 – departure to unregulated jurisdictions. That is, where trading is prohibited, but the activities of offshore companies are allowed. As well as opening an unregulated company and working with clients through it.
This path is a dead end for both brokers and regulators. Large companies that have been licensed will lose competitiveness compared to small brokers that have never been regulated.
2 – departure to other regions
The way out, it would seem, is that the EU is a large market, the main one for many brokers. There is, however, Latin America, which many brokers undeservedly forget.
3 – development of an integrated approach
After all, brokers offer not only trading currencies and contracts. There are many products that are not so familiar to work with, but they could help brokers adapt to new conditions.
Even if Europe does not ban trading in currencies and contracts, tightening measures will still force brokers to radically change their approach to trading.
